Silver Market Morning

Gold Today – The gold price closed at $1,167.7-0 up 70 cents on Tuesday. It was then taken down overnight to $1,150 and London took it down to $1,145 ahead of the Fix. The euro is slightly weaker this morning at $1.2489. The Fix was set $1,145.25 down $24.00 and in the euro at €917.301 down €16.61, while the euro stood weaker at $1.2485. The volumes of net gold traded were two sellers selling 40,000 ounces and one buyer buying 48,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,145.50 and in the euro at €917.43.

Silver Today – The silver price closed in New York at $16.03 down 13 cents. Ahead of New York’s opening it was trading at $15.33.

Gold _{(very short-term)} Gold will continue to look for a bottom, in New York, today.

Silver _{(very short-term)} Silver is likely wait for gold to find a bottom, in New York, today.

Price Drivers

In New York there were sellers of 2.391 tonnes of gold from the SPDR gold ETF and a sale of 0.40 tonnes from the Gold Trust on Tuesday. The holdings of the SPDR gold ETF were at 738.819 tonnes and in the Gold Trust at 160.42 tonnes. The fall in the gold price continues to be brutal but driven there by traders and speculators not large physical volumes.

It was not dollar strength that dropped the gold price overnight, but certainly the U.S. elections mid-term had investors standing back, leaving the market open to traders to dominate the price. The Technical picture continues to be negative.

With the Republicans now in power in both Houses the future of the U.S. government for the next two years portends more emasculation of policies or will it mean that Republican policies will get through? Somehow we cannot see the President bowing out from the job he was elected to do. It is likely we will see more political squabbling for the next two years at a time when the U.S. economy needs to be supported by government. We do not see the result as bad for the gold and silver price. Precious metals are more likely to follow the Technical picture and the dollar than they are to follow U.S. politics. But where U.S. politics could hurt the dollar is to repeat the drama last year of the Fiscal Cliff”? Certainly, the environment for a further credit rating downgrade of the U.S. will hurt the credibility of the dollar and also the rest of the monetary system.

Chinese demand did start to come in yesterday but not yet in force, still. As we said yesterday, “The demand from Asia has not come in yet, so whether we see more falls or a bounce is not dependent on traders, so much as it will on investors sitting on the sidelines, at the moment.” Indian demand is pausing ahead of the ‘marriage season’ at the end of this month. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

Silver– Silver prices have decided the way forward is down. www.SilverForecaster.com

Kind Regards,

Julian D.W. Phillips for the Gold & Silver Forecasters